NEW YORK (Reuters) - In less than one hour on Tuesday, the U.S. stock market surged by 4 percent -- for no apparent reason.

The last hour of trading was the most volatile final hour in two months -- and it occurred at a speed that frightens many, from experienced hedge-fund managers to mom-and-pop investors.

The late-day "melt-up" that pushed the S&P 500 index <.SPX> out of bear-market territory might be construed as good news. But it brings back echoes of the "flash crash" that saw markets dive by several hundred points in a matter of minutes, and it's a big reason many are staying away from the market.

"Everyone is scared in both ways -- the shorts are scared, the longs are scared, everyone is scared. The high-net-worth investor is very, very scared," said Stephen Solaka, managing partner at Belmont Capital Group in Los Angeles, which manages money for independent wealth advisers and family offices.

Tuesday's move was the latest example of an erratic, high-octane stock market increasingly driven by levered exchange traded funds and complicated hedging and options strategies that unwind with dizzying speed.

It's a far cry from when the U.S. stock market was viewed as a place for capital-raising by businesses seeking to expand and a place for investors looking to put their savings to work.

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Wow, thats right; people used to do long term investments as a way of raising capital for their businesses.

Was talking to a fiancial advisor from the Mainline Philly area last week.

For most of his clients the goal now is nothing more than capital preservation in a market gone mad.

The fiancial community no longer rationally sees to it that capital finds its way to where it is needed.

It's becoming little more than a casino based on automatic trading by computer algorithms.

The little investors just can't keep up.

I know a lot of you will raise your eyebrows and dismiss this complaint as nothing but class envy, but this insane market is another example of what happens to society when it embraces the philosophy that GREED IS GOOD.

I think this system needs to seriously and irrevicably crash before we find our way back to sanity.

Was talking to a fiancial advisor from the Mainline Philly area last week.

For most of his clients the goal now is nothing more than capital preservation in a market gone mad.

The fiancial community no longer rationally sees to it that capital finds its way to where it is needed.

It's becoming little more than a casino based on automatic trading by computer algorithms.

The little investors just can't keep up.

I know a lot of you will raise your eyebrows and dismiss this complaint as nothing but class envy, but this insane market is another example of what happens to society when it embraces the philosophy that GREED IS GOOD.

I think this system needs to seriously and irrevicably crash before we find our way back to sanity.

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Well we could reform it before it crashes, but then that would require foresight, not an item in high demand on Wall Street these days.

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